Bally Technologies announced record diluted earnings per share of $0.54 and $1.85 and record revenue of $247 million and $900 million, for the three and twelve months ended June 30, 2008, respectively. Diluted EPS adjusted for share-based compensation for the three and twelve months ended June 30, 2008 was $0.57 and $2.00, respectively.  

“Our record fiscal year confirms that we are continuing to execute on our strategy to deliver industry-leading technology and games that perform and provide value for our customers,” said CEO Richard M. Haddrill. “The steady increase in our gaming operations install base and our growing foundation of systems customers continues to drive our recurring revenues and is helping to deliver greater shareholder value. We are executing very well on innovation and delivery across all product lines.”  

“We are pleased with our continued strength in North American ship share and are well-positioned in this challenging replacement cycle because of our improved suite of products and our customer-centric team,” said COO Gavin Isaacs. “Our growing market share reflects the continued demand for Bally games and the strength of our Alpha-based products.”  

Three Months Ended June 30, 2008 Compared with Three Months Ended June 30, 2007

  • Total revenues increased 22 percent to $247.4 million as compared with $202.4 million in the same period last year.
  • Operating income increased by 63 percent to $56.4 million as compared with $34.6 million in the same period last year.
  • Operating margin was 23 percent in the three months ended June 30, 2008 as compared with 17 percent in the same period last year.
  • Net income increased by 69 percent to $31.3 million, as compared with $18.5 million in the same period last year.
  • Adjusted EBITDA was $75.2 million, a 44-percent increase as compared with the same period last year.
  • Selling, general and administrative (“SG&A”) expenses declined to 27 percent of total revenue from 28 percent for the same period last year.  

Year Ended June 30, 2008 Compared with Year Ended June 30, 2007  

  • Total revenues increased 32 percent to $899.7 million as compared with $682.3 million in the same period last year.
  • Operating income increased by 197 percent to $199.2 million as compared with $67.0 million in the same period last year.
  • Operating margin was 22 percent in the year ended June 30, 2008 as compared with 10 percent in the same period last year.
  • Net income increased by 380 percent to $107.2 million, as compared with $22.3 million in the same period last year.
  • Adjusted EBITDA was $271.8 million, a 96-percent increase as compared with the same period last year.
  • SG&A expenses declined to 27 percent of total revenue from 30 percent for the same period last year.  

Highlights of Certain Results for the Three Months Ended June 30, 2008

Gaming Equipment

  • Revenues increased nine percent to approximately $113.7 million as compared with the same period last year.
  • New gaming device sales increased to 7,360 units as compared with 7,241 units in the same period last year.
  • ASP of new gaming devices, excluding OEM sales, increased six percent primarily as a result of product mix.
  • Gross margin increased from 41 percent in the same period last year to 45 percent, primarily due to the increase in ASP discussed above and improved purchasing and manufacturing efficiencies due to increased volumes and lower manufacturing costs due to the standardization of game platforms.  

Gaming Operations

  • Revenues increased 36 percent to approximately $68.8 million as compared with the same period last year.
  • Gross margin increased to 68 percent from 63 percent for the same period last year, principally due to increases in certain participation and rental revenue with a relatively fixed cost of operating expenses and a reduction in royalty expense related to the removal of third-party games.
  • Revenue and gross margin in fiscal 2007 included daily fees that relate to certain contracts which have been deferred in fiscal 2008. Approximately $3.0 million in daily fees generated during the fourth quarter of fiscal 2008 were deferred pending delivery of certain contractual commitments.  

Systems

  • Revenues increased 52 percent to approximately $53.8 million as compared with the same period last year, primarily as a result of continued acceptance of the Company’s products including the Company’s iVIEW player-communication devices and Power Bonusing software.
  • Gross margin of 75 percent reflected a slight decline from 77 percent for the same period last year as a result of product mix.
  • Maintenance revenues increased to approximately $11.5 million from approximately $9.4 million in the same period last year.
  • As of June 30, 2008, the total number of iVIEW player-communication devices purchased and committed to be purchased was approximately 120,000 units.  

Highlights of Certain Results for the Year Ended June 30, 2008

Gaming Equipment  

  • Revenues increased 27 percent to approximately $410.1 million as compared with the same period last year.
  • New gaming device sales increased 24 percent to 26,397 units as compared with 21,372 units in the same period last year.
  • ASP of new gaming devices, excluding OEM sales, increased five percent primarily due to product mix and price increases during the period.
  • Gross margin increased to 45 percent from 36 percent in the same period last year, primarily due to the increase in ASP discussed above and improved purchasing and manufacturing efficiencies due to increased volumes and lower manufacturing costs due to the standardization of game platforms.  

Gaming Operations

  • Revenues increased 34 percent to approximately $236.0 million as compared with the same period last year.
  • Gross margin increased to 66 percent from 59 percent for the same period last year principally due to increases in certain participation and rental revenue with a relatively fixed cost of operating expenses and a reduction in royalty expense related to the removal of third-party games.
  • Revenue and gross margin in fiscal 2007 included daily fees that relate to certain contracts which have been deferred in fiscal 2008. Approximately $12.5 million in daily fees generated during the year ended June 30, 2008 were deferred pending delivery of certain contractual commitments.  

Systems

  • Revenues increased 54 percent to approximately $206.3 million as compared with the same period last year primarily as a result of continued acceptance of the Company’s products including its iVIEW player-communication devices and Power Bonusing software.
  • Gross margin increased to 73 percent from 72 percent in the same period last year primarily as a result of product mix.
  • Maintenance revenues increased to approximately $41.8 million from approximately $34.3 million in the same period last year.